Canada Wants Dispute Mechanism in NAFTA Redo

Canada says it is critical that the North American Free Trade Agreement includes a dispute resolution mechanism, setting up a potential clash with the United States once renegotiations begin next month. The United States goals for the NAFTA renegotiation released last week include a desire to ditch the Chapter 19 dispute settlement mechanism. That mechanism has hindered the U.S. from pursuing anti-dumping and anti-subsidy cases against Mexican and Canadian firms. However, Canada’s ambassador to Washington, David MacNaughton told Reuters that Canada thinks “it’s critical to have some kind of a dispute resolution mechanism incorporated.” Under Chapter 19, which Canada insisted be in NAFTA, binational panels hear complaints about illegal subsidies and dumping and then issue binding decisions. The United States has frequently lost such cases. MacNaughton said he was not surprised by the list of U.S. demands. He also noted that Canada would continue to defend its system of tariffs and quotas that keep domestic dairy prices high and imports low.